Chief Justice Warren E. Burger: We will hear arguments next in 75-536, Nashville Gas Company against Satty.

Mr. Wray I think you may proceed when you are ready.

Mr. Charles K. Wray: Mr Chief Justice and may it please the Court.

I am here today representing the petitioner Nashville Gas Company in this case.

This case present for consideration by the court the question of whether certain employment policies of the Nashville Gas Company which treated pregnancy differently from the treatment afforded in sickness and accident constitute unlawful sex discrimination and violation of Title VII of Civil Rights Act 1964.

As such it is a sequel, I believe to the case General Electric Company versus Gilbert decided by this court in December last year.

Both the District Court and the Court of Appeals ruled against my client on the issues here presented essentially on the grounds that since only women became pregnant and they were treated differently from employees suffering from sickness and accident.

Generally that was sex discrimination, unlawful sex discrimination.

I submit that, that rationale was rejected by this court in the General Electric case, both the lower court decisions preceded, this court's decision in General Electric.

Thus I think we are here today to determine whether the holding and the underlying rationale of General Electric extend to the factual situation presented by this case which are admittedly somewhat different from the factual situation of the General Electric case.

There are really two factual circumstances involved here.

The first is that the Nashville Gas Company has a sick leave policy wherein it permits employees a certain number of days of absence with pay from covered sickness and accident.

This plan differs from the General Electric plan.

In that seniority is an element of the number of sick leave days to which the employee is titled. That almost is not present in General Electric.

Also the gas company policy has a specific exclusion for illnesses brought about by the employee's willful act.

In this case Mrs. Satty, the plaintiff, had been an employee of the gas company for several years at the time she became pregnant when she was no longer able to work, she was placed on pregnancy leave and was -- had she been absent as a result of sickness or accident rather than pregnancy she would have been paid for a portion of the time that she was absent from work.

The other factual circumstantial issue here is the company's treatment of seniority for job bidding purposes as it reflects pregnancy leave.

When Mrs. Satty went on pregnancy leave, the company was contemplating converting certain of the clerical functions in the department of which she was employed, too computive and as a consequence it was decided that the job that she had held would not be filled, that the job would be abolished.

Thereafter, when Mrs. Satty was able to return to work after the birth of her child, she was given a temporary job by the company.

That job lasted approximately one month and at the end of that time the temporary work was completed. During that month she beared on three permanent job openings with the company.

Now, in each case the job was awarded to another employee, another female employee, I might add.

His initial date of hire was more recent than Mrs Satty's but the company policy was such that when you had been absent on pregnancy leave, you were not permitted to retain your previously accumulated seniority for job bidding purposes.

Unknown Speaker: At that point Mr Wray, had she been taken back, then would she regain her prior seniority?

Mr. Charles K. Wray: Your Honor, the record does not, I can not answer that question and I do not think it is reflected in the record.

Unknown Speaker: Are these provisions Mr. Wray, in any way are the result of collective bargaining or they are just employer policy unilaterally balanced?

Mr. Charles K. Wray: The record does not reflect that and I am not sure to answer Mrs Satty was not a employee covered by collective bargaining agreement.

They are certain employees of the company who are and I do not know to what extent the policy as applied to non union employees might be the same as negotiated for the union employees. I just do not know the answer to that question.

Unknown Speaker: You do not know and the record does not show?

Mr. Charles K. Wray: That is correct.

The record does not show that.

Unknown Speaker: Was not Mrs. Satty employed for a brief period after her pregnancy terminated --

Mr. Charles K. Wray: As a temporary employee.

Unknown Speaker: Yes but did she have any job bidding rights during that period?

Mr. Charles K. Wray: Well, Your Honor I am not sure whether in that context her seniority would run from the date her temporary work started or not but the people who were awarded the permanent jobs in preference to Mrs Satty had their employment predated of the time of her temporary work.

Unknown Speaker: Well it is not clear to me then what the job bidding seniority issue really is, I think I understood you to say you did not know whether or not if she have been reemployed that she will have seniority.

Mr. Charles K. Wray: Well, no I understood Mr Justice Blackmun's question and perhaps I understood it was had she gotten back a permanent position, would her seniority started running at the time she got that new permanent position back or would she the be restored on a previously accumulated seniority and that is what I said is not clear from the record.

Unknown Speaker: So the issue here relates to there not having been taken back at all on a permanent basis?

Not being able to bid on those two vacancies?

Mr. Charles K. Wray: Well that she bid successfully.

Unknown Speaker: Successfully?

Mr. Charles K. Wray: Yes now--

Unknown Speaker: She was not employed?

Mr. Charles K. Wray: Well not employed in a permanent position, I mean she was bidding on those position while she was in this temporary status.

Unknown Speaker: Mr Wray, do I correctly understand that she not only did not receive seniority for the period of her pregnancy but she also, because she lost her job, there lost all her seniority that she had accumulated up till the time of the --

Mr. Charles K. Wray: For job bidding purposes Your Honor that is correct but she did not lose it for pension and vacation purposes but the job bidding purpose that is correct.

Justice Thurgood Marshall: She could not have vacation when she was working?

Mr. Charles K. Wray: When she went on the pregnancy leave had she been entitled to any vacation, heading a crude vacation at that time would have been paying and had she come back.

I think she have been an employee for approximate for three-and-half years at the time she went on pregnancy leave.

Had she come back and gotten a permanent job, the vacation to which she would have then been entitled would have been based on those three-and-half years.

Justice Thurgood Marshall: So that the only penalty was on job bidding?

Mr. Charles K. Wray: That is correct Your Honor.

Unknown Speaker: Mr. Wray, enlighten me what is the business justification for the deprival of seniority rights?

Mr. Charles K. Wray: Your Honor, I think that the rationale underlying that policy is this.

I think it is rational for an employer to have a seniority policy.

Think such a policy reward, loyalty and continuity of service.

Absences are disruptive to the employer and need not be encouraged and within that context, I think it is rational for the employer to provide favored treatment for those persons who remain on the job rather than absenting themselves from work for whether it is to pursue additional education, to take another job, to go home and do nothing for a while.

All those people who --

Unknown Speaker: Oh yes but the distinction is between one who is absent because of pregnancy or one who is absent for other types illness, is it not?

Mr. Charles K. Wray: Well that is the position which the lower courts took and that is the argument of the respondent,in this case, yes, Your Honor but--

Unknown Speaker: Well, am I not correct that had she been out because of appendicitis, acute appendicitis, she would have not lost her seniority rights?

Mr. Charles K. Wray: Alright, Your Honor, the only, this policy in this respect is not a written policy and I do not really mean to suggest that the answer to that question is that she would have lost it, but the only examples in the record of absences which are permitted without loss of seniority are be that heart attack, back trouble and automobile accident.

Unknown Speaker: Why according to District Court, the answer to Mr. Justice Rehnquist, question is yes, she would have retained her seniority, she would not have lost it.

Mr. Charles K. Wray: I think that is a fair inference, yes sir, I am just saying that appendicitis does not happen to be one of the examples covered in the record and this is not pursuant to a written statement policy.

Unknown Speaker: Mr. Wray, may I ask if her job had not been abolished, she would have filled it on return from her pregnancy leave, would she?

Her old job, if it had not been abolished.

Mr. Charles K. Wray: I am not sure of the answer to the question your Honor, they might have put the job, they did not regard themselves as obligated to hold a job open, so even if it were a job that would not being abolished it might have been put for bidding and presumably someone else during her absence or after her return to temporary status.

If it had been put up for bidding someone else might well have gotten it.

Unknown Speaker: And she without seniority could not have bumped that person?

Mr. Charles K. Wray: That is correct.

Unknown Speaker: Well, I thought you said that this loss of seniority status is only for purposes of promotion, or bidding for a job.

Now what you have told me now is that her pregnancy, she lost all seniority for all purposes including reinstatement in her former job, is that right?

Mr. Charles K. Wray: The position of the company is I believe your Honor that when an employee goes on a pregnancy leave, educational leave, some form of personal leave the company does not necessarily hold the job open.

Unknown Speaker: Well, but suppose the job was still open, I gather from what you say they need not have rehired her, after her pregnancy leave.

They could have filled it with some new employee from outside, is that right?

Mr. Charles K. Wray: No your Honor, if at the time she was able to return to work, that job was open and had it been put for bid if, some other employee.

Unknown Speaker: Let us suppose it had not been, I know you that is what you said if it had been put up for bid then she would have lost it, but suppose it was still open.

Mr. Charles K. Wray: Excuse me, you Honor, if it was still open I assume the company has a right simply to put her back in that position and without any bidding but if it had been put up for bids, I want to make this point very clear she would have been given priority over a non employee, I think that is a very important distinction, now if some person already employed with the company were bidding on it, presumably --.

Unknown Speaker: But if no one else had bid on it, it was still open, I gather you are telling me, she would have got it back.

Mr. Charles K. Wray: Yes your Honor.

Unknown Speaker: Alright now suppose she had been in there for another year then she wanted to bid on some new job opening, what would her seniority for purposes of bidding after she had been back at the job, another year be?

Mr. Charles K. Wray: I do not know the answer to that question, it would be at least a year and this goes back --

Unknown Speaker: -- what about the three and a half years of ....

Mr. Charles K. Wray: Your Honor, the record does not reflect whether her previously accumulated seniority would have been restored had she gotten a permanent position or not.

Unknown Speaker: Do you really think that is so, that the record does not show or that you say that the answer to that question we just cannot assume, we just, it might be one way or might be the other.

I thought she simply lost her seniority for a job bidding purposes.

Mr. Charles K. Wray: I have had the question asked to me before and I did not know the answer.

Unknown Speaker: --- would have been then the company's interest to put it in the record if she did not lose her seniority?

Mr. Charles K. Wray: Proceeding with the question of the rationale underlying this policy --.

Justice Thurgood Marshall: Well, Mr. Wray, before you get away from this, you said a minute ago that if she came back after her pregnancy, “the company had the right to give her a job back”.

What right did she have?

Mr. Charles K. Wray: Your Honor, she would be given preference over persons who had not been employed by the company.

In other words if there was a job there and she wanted it and there was someone who had never been employed by the company who wanted it, Mrs. Satty would have gotten the job.

Justice Thurgood Marshall: And she also had right to the job if nobody in the world wanted it to, did not she?

Mr. Charles K. Wray: Yes sir.

Justice Thurgood Marshall: What other right did she have?

Mr. Charles K. Wray: She had the previously, that she retained her seniority for vacation and pension purposes and she did have the right, she was given preference of temporary work when it was available.

Justice Thurgood Marshall: If it was available?

Mr. Charles K. Wray: Yes as it was in this case.

Justice Thurgood Marshall: Is that the end of her rights?

Mr. Charles K. Wray: I believe that is all that occurred to me, yes Your Honor.

Justice Thurgood Marshall: And yet if somebody was out with illness of any other illness other than pregnancy, what would their rights be?

Mr. Charles K. Wray: Your Honor, in so far as all the other illnesses were heart attack, back trouble automobile accident the person --

Justice Thurgood Marshall: Let us take heart attack.

Mr. Charles K. Wray: Okay we take the heart attack, that person would come back and presumably the company would endeavor to restore that person to the former position if it was available, if not to give him a comparable position and it would let him retain that previously accumulated seniority for job bidding purposes.

Justice Thurgood Marshall: And the difference the reason for the difference is?

Mr. Charles K. Wray: The reason for the difference is Your Honor, I think explaining what I had feel to to be rationale underlying a seniority policy that is to encourage continued employee attainment.

Justice Thurgood Marshall: But two people that could not work.

A woman delivering a baby and a man having a heart attack.

Mr. Charles K. Wray: That is correct Your Honor.

Justice Thurgood Marshall: They, both of them equally cannot work.

Mr. Charles K. Wray: I think the difference Your Honor is why were they not on the job working and I submit that the.

Justice Thurgood Marshall: Because they were unable to.

Mr. Charles K. Wray: Well but I submit that the person who has had the heart attack, has been subjected to a essentially involutorial, unfortunate accident, I submit that it is fair to assume that that employee would rather be on the job than in the hospital retaining seniority with a heart attack and I think that distinguishes it from pregnancy which I submit is essentially a voluntary condition, it is subject to the control of the employee both before and after the fact of conception and I submit it reflects an employee sense of values, priorities whatever you want to call it, where in the employee as in the case of pregnancy exulting her personal life choice decision above the interest of the employer having, the interested employee being to have person stay on the job and be absence.

Unknown Speaker: You said automobile accident?

That was another exception, did you?

Mr. Charles K. Wray: Oh yes.

Unknown Speaker: Suppose the injuries suffered in the automobile accident, without question were entirely the employee's on grossest kind of negligence?

Mr. Charles K. Wray: Your Honor even viewed as a gross negligence situation, I still do not think it is something that employee would ever say, he intended it to have it happen and I think that distinguishes it from pregnancy.

Justice Thurgood Marshall: Suppose he got drunk and also smoke reefers and injected heroine and as a result crashed his car.

Mr. Charles K. Wray: I submit that that is significantly different from typical pregnancy and that it is something that the employee would not choose or intend to have happen and I do not think the same can be said of pregnancy.

Unknown Speaker: From the, just the point of view economic self interest of your client, the employer what is the rationale behind this, when you rather have an experienced employee bidding on the job, than a less experienced one?

Mr. Charles K. Wray: I do not think there is no cost justification at least, readily identifiable in this case as there is in General Electric --.

Unknown Speaker: There is but the economic self interest justification will be?

Mr. Charles K. Wray: Well I cannot put in dollars and cents terms, I think the interest is having these employees continue on the job without absenting themselves for reasons to personal preference.

Now within that framework, the gas company does provide, a person like Mrs. Satty has experience which is valuable to the company and I would submit that it is in the company's interest to have her return to work and I submit the company offers certain incentives.

Unknown Speaker: And have her in a vacancy rather than somebody less experienced, would not it be the employers --?

Mr. Charles K. Wray: Well no your Honor, I do not think so, I mean they are for the incentives, namely temporary work, crude seniority of vacation and pension and most important priority over non employees.

I think that is an incentive where by the company would try to take benefit of that prior valuable experience but the company is not going to extend that incentive at the expense of those employees who have stayed on their jobs--

Unknown Speaker: They did not get pregnant.

Mr. Charles K. Wray: Right.

It is stipulated here for example that this is the same, the pregnancy treatment is the same treatment that would be afforded to someone who had taken an educational leave for example.

They would come back with preference over non employees --

Unknown Speaker: Was that for example or is that just it an educational leave.

You limited the physical disability to heart attack, automobile accident and one other. In the record it is just educational leave, Is it not?

Mr. Charles K. Wray: I believe that is the only other type of leave where they have had employees go out for that reason --

Justice William H. Rehnquist: Mr. Wray supposing that Mrs. Satty instead of having been absent for pregnancy had a heart attack and had then come back to the company after the same period of time, how would she have been treated differently under the company's policy, I get the impression that is not quite as precise as I have thought.

Mr. Charles K. Wray: When she came back, I think the company first endeavored to keep the job open for her. If they were -- I am getting away from situation where the job is abolished.

Justice William H. Rehnquist: Assume the job was abolished.

Mr. Charles K. Wray: Okay, I think she would have come back and she would have had retained her previously accumulated seniority for job bidding purposes and one of those three jobs on which she bid came up, she would have been awarded the job.

Unknown Speaker: Well you are talking in terms of what the company would have done or what the company was obliged to do.

We are talking about the rights of the employee, enforcible rights of an employee here not what the company might give them as a matter of grace.

Mr. Charles K. Wray: Well, I think the answer is that it would be the company policy to endeavor to do what I have said.

I think an answer to some interrogatories that are in the record the company tried to take the position and I think probably they were not obligated to so, but that was in their policy, not in any contractual sense but just in a practical factual sense, that is what would have happened.

I would like also to address in little more detail,the absence of the cost justification which is already been cited in the opposing briefs and has been brought by Mr. Justice Stewart.

I think the difference in these treatment of pregnancy on the one hand and these other accidents and illnesses we have identified on the other hand is basically that the company I submit rationally views pregnancy differently from sickness and accident and I submit that this court explicitly did the same thing in the General Electric case.

Unknown Speaker: You are going on to explain why including pregnancy would cost the company money?

Mr. Charles K. Wray: Not in the seniority context.

No, I am trying to say why I do not think the absence to that justification is material.

Unknown Speaker: How about the -- in order to back pay it or to have sick leave pay?

Mr. Charles K. Wray: Well, Your Honor, briefly on the question of sick leave pay, I think General Electric is clearly controlling, the only difference is --

Unknown Speaker: So, how would it cost the company money?

Mr. Charles K. Wray: They would be permitting more days of absence.

Unknown Speaker: There is a limit on the number of sick leaves I take it.

Mr. Charles K. Wray: Yes, Your Honor, but the only situation in which you can envision that it would not cost the company more to cover pregnancy is if you assume that every woman who became pregnant would have used up all of her sick leave days for other reasons.

Unknown Speaker: How about as compared with men though?

Mr. Charles K. Wray: There is no evidence in the record as to the extent to which men as a group receive sick leave days--

Unknown Speaker: The argument here is only that sex discrimination.

That is the whole issue. Is it or is it not?

And it seems to me that, do not you, suppose every man in the company exceeds his sick leave every year and none of the woman ever did, as long as you exclude pregnancy.

Mr. Charles K. Wray: Your honor, I think that General Electric would have called that a disparate impact that would be sex discrimination based on effect or impact and there is simply no evidence in this record that the effect of the company's policy was to give men more days absence with pay than women.

I think it is directly analogous to the analysis in General Electric in that respect.

Unknown Speaker: But to say that it would cost them money, at least must assume that women will be out on sick leave more often than pregnancy included and that men would not be taking so much sick leave.

Mr. Charles K. Wray: Well, to me there is no -- there are two points.

I think that if you covered pregnancy where you had not covered it before, you would be paying more sick leave than previously unless you assume that women already use up all of their sick leaves for other reasons.

Now, as to whether not withstanding what happens to the women if the men somehow get more benefits out of this plan it would be sex discrimination, but there is no evidence in this record that men get more benefit out of the plan.

Justice Thurgood Marshall: Mr. Wray, on strictly money, you say that the pregnant woman, when she comes back can get vacation pay. Right?

Mr. Charles K. Wray: She retains her seniority for --

Justice Thurgood Marshall: And she gets the vacation pay.

Yes or no?

Mr. Charles K. Wray: Your honor, when she comes back she is treated as having a three-and-a-half years of service and is then entitled to whatever vacation.

Justice Thurgood Marshall: Which costs the company money?

Mr. Charles K. Wray: That is right.

Justice Thurgood Marshall: Yet if they give her a job, it does not cost them any money.

Mr. Charles K. Wray: Well let me answer it--

Justice Thurgood Marshall: Am I right?

Mr. Charles K. Wray: It does not cost them the seniority --

Justice Thurgood Marshall: So where is your economic argument?

Mr. Charles K. Wray: Your honor, as applied to seniority for job bidding purposes I do not think it is an economic argument.

We pay the women who go on pregnancy leave accumulated vacation time for example.

Now, if we did not do that, we could stand up here and say we have cost justification.

The only way we can correct that policy on -- change that policy as it applies to seniority for job bidding purposes is not by absorbing any additional cost to ourselves.

We can only do it by penalizing those other employees who choose not to go on pregnancy leave or cannot because of biological reasons be pregnant.

If viewed in that way I think there is even less reason to infer any pretext in this situation than there would be if we could set up here with a dollars and cents justification.

Unknown Speaker: Mr. Wray may I ask you --

Did Nashville Gas discharge a woman because she become pregnant?

Mr. Charles K. Wray: No, your honor I do not believe that could.

I am not saying that, that would necessarily be unlawful, but the rationale for our seniority policy which I have advanced here today would not support a termination and I think these facts are different in which she clearly has priority over non employees coming back I think that distinguishes it from the termination situation.

Unknown Speaker: Mr. Wray, may I ask you this question?

I understood you had answer a question posed by, one of my brother in the earlier to the effect that under General Electric if the evidence showed that the men as class got more sick leave than women has received that that might be sex discrimination.

Is that so?

Mr. Charles K. Wray: Yes, Your Honor.

Unknown Speaker: But you understand General Electric the whole if review of the fact shows that one sex, members of one sex get more benefits than members of the other sex, that then the disfavored sex automatically has a claim? Is that your view of the holding?

Mr. Charles K. Wray: I do not know that it would necessarily go to that.

Unknown Speaker: It seems to follow from your other analysis that if you just proved that more leave is granted to males and females or vice-versa is discrimination against the other class.

It seems to me you read General Electric that way.

Mr. Charles K. Wray: Well, I have read the proof, and well, I do not know the proof in General Electric got--

Unknown Speaker: Does it make any difference how the allocation of benefits actually works out? Is that relevant at all?

Mr. Charles K. Wray: I would say it is relevant.

Unknown Speaker: Then all of those who get the lesser amount always have a claim.

Then, is it right?

Mr. Charles K. Wray: I really have not dealt the question through to that point.

I submit that there is no evidence in this case that these policies provide more benefits to men as a group than to women as a group.

Unknown Speaker: You seem to concede that if such evidence represent it might be controlling.

Mr. Charles K. Wray: I would concede if there was evidence that women as a group were receiving less benefit from the plan that under General Electric that might be important.

Unknown Speaker: Where is the burden of proof?

Mr. Charles K. Wray: I think General Electric very clearly says that the burden is on the plaintiff.

Unknown Speaker: Do you not think there is a pretty good probability that the benefits do in one way or the other?

Mr. Charles K. Wray: Not anymore than it would had been in the General Electric case.

Unknown Speaker: Why I realize that?

Mr. Charles K. Wray: I would like to reserve the balance of my time.

Chief Justice Warren E. Burger: Mr. Weismueller.

Argument of Robert W. Weismueller

Mr. Robert W. Weismueller: Mr. Chief Justice, may it please the Court.

The respondents had today admitted that they did not believe that they should fire Mrs. Satty for getting pregnant.

They believe this would be a violation of Title VII.

We believe the record is clear, that is what petitioner did and as a fact on Mrs. Satty was more devastating than they had just come out and said you are fired.

Instead they constructively terminated her and made it very hard for her to ever get back to Nashville Gas Company.

Their policy of placing pregnant employees on pregnancy leave rather than sick leave had the following effects.

It caused Mrs. Satty immediately and forever and I believe that the record does reflect that it is forever that Mrs. Satty would lose all competitive seniority that she had previously earned. In the affidavit of Mr. Henson, who is the Vice President for personnel, he makes the very clear statement that an employee who is placed on pregnancy leave and returns to permanent employment retains seniority, she had previously cumulated for purposes of pension vacation but does not retains such seniority for the purpose of bidding on jobs.

There is no qualifier in there about if she gets the job back, she gets her seniority back or anything else.

I think that we can take this plain language to mean that this is gone forever.

She can never retain the seniority if she is lucky enough to get a job with Nashville Gas Company, she has to work for three-and-a-half years.

Unknown Speaker: Has this reflected in a collective bargaining contract.

Mr. Robert W. Weismueller: Your honor, the employee manual is where this was collective bargaining contract was never made a part of the record, was never made a part of the trial.

Now, whether the employee manual and the employee policies reflected in that--

Once Mrs. Satty returned to work, after the birth of her child, she was placed at the bottom of the seniority ladder.

I would also like to point out, to the Court that she was placed at the bottom of the salaries ladder.

She was making $ 130.80 when she returned as opposed to $ 140.80 when she left.

The differences can be seen in the pay scale which is found in the record at page ninety nine of the appendix.

$ 140.80 is what she was making when she left which is commensurate with her seniority that she had at that time.

$ 130.80 is commensurate with entrance.

That is, she started over again, it seems to us from the record, not only in job bidding seniority but also longevity pay raises which she might have had previously, were taken away from her.

Unknown Speaker: You agree with your friend's statement over the record that seniority is preserved for only vacation purposes and pension.

Mr. Robert W. Weismueller: Yes honor.

Unknown Speaker: No other benefits?

Mr. Robert W. Weismueller: No other benefits.

Unknown Speaker: Well, that is as applicable to pregnancy.

This case.

Mr. Robert W. Weismueller: Yes, in this case.

Unknown Speaker: If one was out on an ordinary sick leave, is that true?

Mr. Robert W. Weismueller: No, your honor.

Unknown Speaker: Only pregnancy leave?

Mr. Robert W. Weismueller: That is right, if one returns from sick leave, not only does one retain his seniority, but actually accrues seniority while sick and if there are any across the board pay raises during the time that, that employee is absent, they are entitled to --

Unknown Speaker: Well, that is perhaps not all that clear.

At least, but it is clear with respect to heart attack or an automobile accident, or one of the kind of disability or --

Mr. Robert W. Weismueller: Well.

Now, the company's general statement, of their sick leave policy is that when employee is absent because of--

Unknown Speaker: Where are you reading from?

Mr. Robert W. Weismueller: MOh, excuse me, page 96 of the appendix, Exhibit one, employee policy manual sick leave and pregnancy leave sections, where it stakes that, when an employee is absent because of illness or non-compensable injury, he will receive pay depending upon his length of service etcetera.

Now, there are no qualifiers there.

The only qualifier is in a separate part of the employee manual, where they talk about pregnancy.

Unknown Speaker: Now, where is that?

Mr. Robert W. Weismueller: That, let us pregnancy--

Unknown Speaker: 98?

Bottom of 98 is that it?

Mr. Robert W. Weismueller: Let us see.

Yes, bottom of 98, that is correct.

Where they state that they may request leave of absence for up to one year.

However, the District Court found and I think it is clear from the testimony that there is no requesting to it. You are forced on pregnancy leave.

The only request involved is can you keep these few illusory rights of vacation and pension for that year.

Unknown Speaker: Is that the pregnant employee required to leave at least five months prior to the expected birth.

Mr. Robert W. Weismueller: That is the written policy, however that is not as the company implemented in this case. However, the company did reserve the right to be the final arbiter of when she would leave.

The company will make that decision.

Not Mrs. Satty.

Not Mrs. Satty's doctor.

Unknown Speaker: How long before the child's birth was she required to leave.

Mr. Robert W. Weismueller: She was required to leave 25 days prior to the birth of the child.

Unknown Speaker: But, that is not an issue in this case.

Mr. Robert W. Weismueller: That is not an issue in this case.

No, your honor.

Unknown Speaker: Mr. Weismueller, Can I ask but maybe an awfully obvious question but you don't seem to have addressed it yet, let us assume, you have demonstrated that your client was discriminated because she got pregnant.

Mr. Robert W. Weismueller: Yes.

Unknown Speaker: And let us assume that some people do that General Electric case holds the discrimination against people who get pregnant is not discrimination on account of sex.

If you make those two assumptions, how can you win?

Mr. Robert W. Weismueller: Well, your honor, I think we are factually distinguishable from the case of Gilbert, actually under the holding of Gilbert.

I believe, we can prevail.

Gilbert did not say all pregnancy related actions of an employer are free from violation of Title VII.

Unknown Speaker: No, but it did hold as I understand it.

That a pregnancy related -- proving a pregnancy related discrimination does not established a prima facia case of violation of the statute.

Mr. Robert W. Weismueller: No, your honor.

Unknown Speaker: Now how do you establish a prima facia case?

Mr. Robert W. Weismueller: First of all, by showing, that there was no business necessity.

In this case, there was no business reason at all, as there was in the Gilbert case.

Secondly, the Court in the gilbert case held that there was an even handed inclusion of risks.

That is all risks that were covered, both sexes, could claim under them.

Once these risks were given, they were never taken excuse me, these benefits were given, they were never taken away.

In this case Mrs. Satty earned seniority.

She had something.

And it is taken away.

There is--

Unknown Speaker: But, she did not have it as a matter of right, that if there were was no collective bargaining agreement and no written employment contract, she had it as a matter of her employer's largess.

This is no collective bargaining agreement, and I gather no individual contractual right, was it?

Mr. Robert W. Weismueller: No, there was no individual employment contract between her and the employer.

Unknown Speaker: You take the position that the manual, created duties, enforcible duties and obligations on the part of the employee and conferred corresponding rights on the employee, enforcible rights.

Mr. Robert W. Weismueller: We take the position that if they have a policy set out in the employee manual and do not enforce it fairly against all persons.

And the reason they do not enforce it fairly is because of sex.

Unknown Speaker: The issue is the application of Title VII.

Mr. Robert W. Weismueller: Yes.

Unknown Speaker: And that makes it an unlawful employment practice for an employer that do certain things.

It is a employer conduct, its not a matter of--

The issue here is whether this conduct constitutes a violation of Title VII.

That is right.

This does not depend on whether the union contracts or written contracts or anything else.

Mr. Robert W. Weismueller: No, your honor, it does not.

This is a Title VII case.

Unknown Speaker: In other words is not the employer manual, almost irrelevant here except as it shed some light on what their practices were as distinguished from what duties they have.

We are dealing with a statutory --

Mr. Robert W. Weismueller: That is correct your honor.

In that focus,it is, Yes.

Also they change Mrs. Satty's status.

In violation of 703 A2, by changing her status from one with three-and-a-half years seniority to one with no seniority.

In doing that, they violated Title VII because, the whole point of Title VII is to protect people from arbitrary barriers to employment or chain arbitrary status changes which are a barrier to employment.

And we maintain, this is totally arbitrary.

One of the reasons that this can be shown to be arbitrary is, this seniority stripping really does not even take effect, until the employ is ready to return to work.

When she is a healthy employee again and in every way similar to a male who has broken his leg, been out for a period of time and returned or any other employee who has done so.

Finally, we should see that twelve women have been forced to take pregnancy leave, no men have been forced to take pregnancy leave in fact no other employee have been forced to take pregnancy leave.

Unknown Speaker: Well is that an issue here?

Mr. Robert W. Weismueller: No.

Unknown Speaker: Is it?

I mean the validity of that question -- factor here or that policy here?

Mr. Robert W. Weismueller: rWell it shows impact upon one group, your honor.

Unknown Speaker: I know but is it -- what did the District Court find or what did the Lower Court find?

Mr. Robert W. Weismueller: As to what, Your honor I am sorry, I do not understand the question.

Unknown Speaker: As to the validity of that practice of requiring people to take pregnancy leave?

Mr. Robert W. Weismueller: Of requiring them to take pregnancy leave, it was no problem.

But, the only way that employee's can lose seniority is by either taking leave of absence or pregnancy leave.

And pregnancy leave is the only situation where employees are forced.

Justice Thurgood Marshall: I have great difficulty in your statement that the employer made her take leave.

She had to take leave at least for an hour or so did she?

Mr. Robert W. Weismueller: Yes.

Justice Thurgood Marshall: Why do you keep saying that, they made her take that leave, that is not before us, no.

Is it?

Mr. Robert W. Weismueller: Well the involuntary--

Justice Thurgood Marshall: Did not she need a leave?

Mr. Robert W. Weismueller: Oh yes sir.

We do not --

Justice Thurgood Marshall: Why do you keep arguing that they forced her to take a leave?

Mr. Robert W. Weismueller: Well, this is the only situation where they forced her to lose her seniority there, possibly I should state it that way.

Chief Justice Warren E. Burger: Did she object to -- Did she challenged their -- the leave of 25 day before the delivery?

Mr. Robert W. Weismueller: Yes, your honor.

I believe the record shows that she felt like she had recovered sufficiently to come back to work.

Unknown Speaker: 25 days before the delivery.

Mr. Robert W. Weismueller: Yes, she was out for five days with water retention.

Unknown Speaker: Yes, but in the District Court, you challenged that requirement as arbitrary and violation of Title VII, the District court ruled against you.

Mr. Robert W. Weismueller: Yes, sir, they did.

Unknown Speaker: And held squarely that does not appear to be arbitrary--

Mr. Robert W. Weismueller: That is correct but in turn--

Unknown Speaker: And you did not bring that issue in there?

Mr. Robert W. Weismueller: No sir, we did not, but Mr. Chief Justice asked me if she --

Unknown Speaker: Yes--

Mr. Robert W. Weismueller: I understood his question being was she ready to come to work that time and yes, she was.

If indeed that was the question.

Unknown Speaker: Well, issue of forcing her to take maternity leave is not here.

Am I right?

Is that right?

Mr. Robert W. Weismueller: No, we are not objecting today to the -- forcing her to take pregnancy leave.

What we do object is forcing her to lose seniority.

That is correct.

Chief Justice Warren E. Burger: Let me ask you.

Mr. Robert W. Weismueller: Well, actually it was triggered at the time that she left under their policy.

Chief Justice Warren E. Burger: Let me ask you question that may shed some light from me at least on your basic proposition.

What if a company, a company, a employer had a fixed policy of not employing women who was pregnant at the time she applied, would that violate Title VII, in your view?

You seem to say that any disparate treatment, because of pregnancy is violation of Title VII.

So, what about my question?

Mr. Robert W. Weismueller: If I have given the court an impression, I do not mean to.

If the the employer can show a valid business reason for not employing a women because she is pregnant, then I do not believe that violates Title VII.

But, if they can show no business necessity, then I believe that it would be violation because if that were the only reason they did not employ her.

Unknown Speaker: Then your answer to the question is, if the company had a flat policy of not employing, it would be violation of Title VII.

Mr. Robert W. Weismueller: Unless, they could show that that flat policy was a business necessity--

Unknown Speaker: The question assumes that they simply have the policy and take the position that they so not have to show any thing, what about that?

Mr. Robert W. Weismueller: Then I believe, that would be a violation of Title VII.

Yes.

Unknown Speaker: You are talking about the business necessity as the term is used in the statute, as an affirmative defense.

Mr. Robert W. Weismueller: Yes, your honor.

Unknown Speaker: The General Electric did not turn on that, did it?

Mr. Robert W. Weismueller: No, because the court never found effect.

Unknown Speaker: Right.

Mr. Robert W. Weismueller: But we believe that here in changing her status, we have shown a discriminatory effect that is they have strictly because of her sex, changed her from some one with three-and-a-half year seniority to no year seniority.

Unknown Speaker: Mr. Weismueller.

Mr. Robert W. Weismueller: Yes sir.

Unknown Speaker: Are you going to address the sick leave policy issue you devoted your argument, for this point I think to the seniority issue.

Mr. Robert W. Weismueller: Yes sir.

As to the sick leave--

Unknown Speaker: I am particularly interested in how you distinguish General Electric with respect to the sick leave issue?

Mr. Robert W. Weismueller: All right sir.

In the General Electric case, my understanding of facts are, that the only limitation was 26 weeks for illness.

In this case, the policy is to give a certain amount of time.

It depending upon the seniority that you have for sick leave after which you have no further sick pay benefits.

Since, there is a finite amount of time that can be taken for pregnancy leave and only that amount of time the employer's liability is limited and without the employers showing that more money is or at least equal money is given to limit under the benefits of this program.

Then I do not believe that this court can assume that equal money or more money is paid to women and then that as I understand that was one of the major concerns of this court in the Gilbert case.

I believe that if--

Unknown Speaker: Well, it sounds like then that on real issues who has got the burden of proving this matter, the record does not show--

Mr. Robert W. Weismueller: That is correct.

The record does not show, your honor and we took this record--

Unknown Speaker: Excuse my interruption.

Mr. Robert W. Weismueller: Also, when this sick leave policy is viewed in the overall context of treatment of women, we maintain that this is just the first stage, in an overall problem of discriminating against women and possibly standing by itself it would be more akin to the Gilbert situation.

But, when taken in context of the seniority issue we believe that it should be upheld.

Unknown Speaker: Well, now you say, possibly I thought in reading your briefs that you had conceded that if we sick leave aspect were here, in a solitary posture Gilbert would control.

Am I mistaken Mr. Weismueller?

Mr. Robert W. Weismueller: No sir, you are not mistaken that is in the brief.

We have rethought the questions since we write the brief.

I guess is my basic answer to that.

One thing I would like to point out to the court before getting away from the seniority issue.

The company maintains, that it also may put some one on sick leave, or excuse me, leave of absence.

And therefore they would lose seniority, if they overran their sick leave but this is just simply is not the case.

Unknown Speaker: Well do not you -- Do you, do you or do not you, concede that if pregnancy were included, the employer would be paying out more sick leave money than he is now.

Forget the--

Mr. Robert W. Weismueller: Certainly seven hundred and--

Unknown Speaker: Forget the comparison with men but is it mainly or mainly not?

Mr. Robert W. Weismueller: Certainly seven hundred and eighty something dollars, because that is what we are claiming in this case, if this court should find that pregnancy should be included in the sick pay and certainly they are going to be added--

Unknown Speaker: So, I think that your client, your client at least had not used all her sick leave --

Mr. Robert W. Weismueller: That is correct, your honor.

She was entitled to sick leave.

However the case of Mrs. Dixon, I think is very instructive, excuse me, is very instructive as to company's policy toward any one except pregnant women. Ms. Dixon had 18 year seniority page 24 your honor, beginning with response to interrogatory 90, Ms. Dixon was absent for ten months essentially in one period and then another period of five months.

She had built up 18 years seniority with the company.

As a result of that she would have been entitled to 23 weeks sick pay.

Yet upon returning to work, Ms. Dixon was granted seniority from the date of hiring.

It did not increase from the time she was gone even though she had gone well beyond her sick leave which was allowed.

Unknown Speaker: In other words, your point is that seniority continued to accrue during those absences.

Mr. Robert W. Weismueller: Yes it certainly did and--.

Unknown Speaker: Let us assume that without including pregnancy that the benefits for men and women, the average benefits for man and women, sick leave benefits for man and women in terms for pay are about equal.

Let us us assume that and now with pregnancy included this going to cost a employer substantially more for women.

Now, assuming those facts would you still argue that there is a sex discrimination because of that sick leave is not paid to women for pregnancy?

Mr. Robert W. Weismueller: Your honor, under the holding of Gilbert, I might argue that I do not believe that would be successful.

Now this company has never shown business necessity, the District Court held they did not even try to make a showing of business necessity for the seniority stripping policy.

It was only in their reply brief to this Court which we received, that they first came or articulated at least this policy of – well we want to reward employees who stay around and do not voluntarily leave to do other things.

We feel that that simply does not get to the problem because an employee is leaving when they are pregnant, as Mr. Justice Marshall pointed out is not because they want to go it is because they have got to go, they are unable to work and also the company in light of its sick leave policies of holding jobs open for very long period of time for people who are out has shown that they prefer experienced employees.

Unknown Speaker: Does the company holds jobs open and grant sick leave and maintain seniority for those, for example, what might we call voluntary surgeries, a cosmetic surgery or--.

Mr. Robert W. Weismueller: Although, that specific question cannot be found in the appendix, in the record, their statement about sick leave is that when an employee is absent because of the illness or non compensable injury, now with that qualifiers, I assume that that would be covered, if there were to be any qualification.

I believe the burden of proof would be upon the company that they do not pay for voluntary surgery or elective surgery.

I believe that the burden of proof would be theirs not ours to show that.

Unknown Speaker: Did the District Court make any findings, I am impressed both from your opponents arguments and yours that that this manual is less than precise in addressing some of the issues.

Did the District Court make any finding on that point?

Mr. Robert W. Weismueller: On what specification?

Unknown Speaker: The question that Justice White asked, whether -- what would be the treatment of a employee who undergoes voluntary cosmetic surgery?

Mr. Robert W. Weismueller: There was no specific finding of fact on that.

Unknown Speaker: Was any requested?

Mr. Robert W. Weismueller: No your honor, there was not.

Unknown Speaker: But how many employees are there in this company about from its title it looks like a--.

Mr. Robert W. Weismueller: 350.

Unknown Speaker: Public utility.

Mr. Robert W. Weismueller: 300-- Yeah, it is Mr. Wray informs me 350.

I do not know of my own knowledge.

Unknown Speaker: So what are its business?

Mr. Robert W. Weismueller: Its business is the installation, maintenance of natural gas in the Nashville Mid-Tennessee area.

Unknown Speaker: And sells gas itself?

Mr. Robert W. Weismueller: Yes.

Chief Justice Warren E. Burger: Do not you think it would have been helpful to the court if the manuals have been made part of the record?

Mr. Robert W. Weismueller: Your honor, I am as surprised as you are that the entire manual is not in there.

When we made up the appendix.

Chief Justice Warren E. Burger: Well, I understood I was basing my question on the proposition that it was not put in evidence.

Mr. Robert W. Weismueller: The entire manual was put into evidence.

Chief Justice Warren E. Burger: Then we have it.

Mr. Robert W. Weismueller: I do not believe so, I checked the record yesterday and I believe it is as limited as what we have here.

When we made the appendix or when we made the record for the appeal the appellants called me, I honestly do not remember whether we agreed that it should all be in there or not.

I know this gentlemen--.

Unknown Speaker: Was not the entire record set up here, it may not have been printed?

Chief Justice Warren E. Burger: Should be in the clerks office.

Mr. Robert W. Weismueller: Well, the record I checked in the clerks office did not have it all.

I hope it is here I think it would be instructive, certainly we would be we have copy of the manual and would be happy to if there is any way to include it.

Be happy to do it but certainly the entire employee policy manual was placed in the evidence in the District Court.h

Chief Justice Warren E. Burger: We will resume at 1 0'Clock you will have a few minutes left of your time.

Mr. Weismueller you have a few minutes remaining.

Mr. Robert W. Weismueller: Yes Your Honor, in the few minutes that I have remaining I would like to use that time to summarize our position.

In striping Mrs. Satty seniority, the gas company put her in the position of someone beginning new with the company as far as what we consider the important accruements of her job were.

She was at the bottom of the seniority scale, she was at the bottom of the pay scale.

Once again, even though she had worked for them for three-and-a half years, this work meant nothing to the employer once she was placed on pregnancy leave.

They have changed her status from an employee with three-and-a-half year seniority to an employee with no seniority.

As a result of this she lost three jobs which she bid on with the company.

The company concedes if she had had her previously accumulated seniority, she would have any or all of those jobs.

She would presently be an employee of Nashville Gas company.

Such a change of status is permanent we believe we have shown under the facts in this record and it is an impediment to Mrs. Satty's ever been rehired by the gas company and if she is rehired to her whole future advent, it will take her three-and-a-half years to return to the position she was in, prior to being pregnant.

In contrast to this we have employees who are sick or injured and out for considerable lengths of time in excess of the time that Mrs. Satty's was out, who not only retained their seniority and their rate of pay but actually accumulate seniority while they are on their sick leave and if any across the board raises are made during that time they get the advantage of this.

All of this was done by Nashville Gas company without a business necessity nor a reason which is consistent or able to stand logical scrutiny.

They claim they want experienced employees, their sick pay policy shows they want experienced employees and yet there is a pool of experienced employees and women who become pregnant that they for no apparent reason to us at least shun.

On sick leave is our position that when viewed in the total context of the companies entire policies toward pregnant women it is discriminatory.

When this is done, when you look at this policy in light of their total policy toward women, you see that this is just the beginning step in the total policy designed to discriminate against pregnant women.

Oh Excuse me Mr. Wray I do not have the time slip, but you have a minute left.

You may proceed.

Rebuttal of Charles K. Wray

Mr. Charles K. Wray: Mr. Chief Justice, may it please the court.

I submit that the the General Electric case controls here.

General Electric stands for the proposition that a distinction based on pregnancy is facially neutral it is not per se sex discrimination.

It may nevertheless be unlawful, if the effect of the policy is to have disparate impact on women as a group as opposed to man as a group.

There is no evidence in the record to that fact and the plaintiff has the burden of proof on that point.

It may also constitute unlawful sex discrimination if the policy is not in fact a pregnancy policy but a men versus women policy if it is a subterfuge, if it is not what it appears to be on its face, there is no evidence in this record that this policy is anything other than a straightforward pregnancy policy and there is nothing to suggest that the burden of proof has been shifted from the typical position of that burden being on the plaintiff and civil litigation.

And for all of these reasons, I submit that the ruling of Court of Appeal should be reversed and the case dismissed.